Canada and the Philippines signed a deal yesterday to help Manila buy military equipment to defend its territory, Canadian Prime Minister Stephen Harper and Filipino President Benigno Aquino said.

The Philippine defence department and state-run Canadian Commercial Corp signed the agreement as Harper met Aquino at Malacanang Palace.

The deal was inked amid a territorial dispute between the Philippines and China over islands and waters in the South China Sea.

"This memorandum of understanding will enable the Philippines to acquire the equipment and expertise it needs to fulfil the country's defence and security agenda," Harper said.

Under the deal, Philippine purchases of equipment and expertise from Canada's US$12.6 billion defence industry are guaranteed by Ottawa.

"This will help us in our efforts to build our defence and security capabilities," Aquino said. "I cannot go into specifics lest they be observed by less friendly individuals."

Faced with communist and Islamist insurgencies and an increasingly assertive China, Aquino noted that the military had just two transport aircraft, no fighter jets and just 132 mainly second-world-war-era ships.

"The fundamental issue is that we have a lot of outmoded equipment," he said.

The Canadian Commercial Corp serves as a go-between between Canadian suppliers and foreign governments.

The Philippines has been in the market for patrol vessels to protect its waters, including areas that overlap with territory claimed by China.

Manila's military treaty ally the United States is set this year to deliver a second refurbished Hamilton-class cutter, previously used by the US Coast Guard, to the Philippine Navy.

This article appeared in the South China Morning Post print edition as Canada to help Manila buy military equipment